Australia reviews AUS$ 1,000 foreign e-commerce threshold

The Australian government is again considering lowering the AUS$ 1,000 Goods & Services Tax threshold on purchases bought from foreign e-commerce websites such as Amazon and eBay.

At present, consumers can make single acquisitions up to this threshold without a 10% Australian GST charge. This places local retailers at a tax disadvantage.

The principle reason for the threshold is to avoid the tax administrative costs of accepting GST registrations and returns from foreign online retailers. However, local Australian retail associations claim that whilst laudable, this should not rule out a much lower limit. By contrast, most EU countries only allow for about €20 VAT exempt small value relief .

The Australian government is expected to conclude on this latest review by February 2015.

Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which this year won International Tax Review's Tax Technology Firm of the Year. Richard qualified as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.